OEB Transcipt - Ontario Energy Board

ONTARIO


ENERGY


BOARD



| | | |
|FILE NO.: |EB-2006-0501 | |
| | | |
|VOLUME: |2 | |
| | | |
|DATE: |April 24, 2007 | |
| | | |
|BEFORE: |Pamela Nowina |Presiding Member and Vice Chair|
| | | |
| |Paul Sommerville | |
| | |Member |
| |Bill Rupert | |
| | |Member |
EB-2006-0501





THE ONTARIO ENERGY BOARD





IN THE MATTER OF the Ontario Energy Board Act 1998, S.O.1998, c.15,
(Schedule B);

AND IN THE MATTER OF an Application by Hydro One Networks Inc. for an Order
or Orders approving or fixing just and reasonable rates and other charges
for the transmission of electricity commencing January 1, 2007.

Hearing held at 2300 Yonge Street, 25th Floor,
Toronto, Ontario, on Tuesday,
April 24, 2007, commencing at 9:36 a.m.






---------------------
Volume 2
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BEFORE:

PAMELA NOWINA Presiding Member and Vice Chair

PAUL SOMMERVILLE Member

BILL RUPERT Member





A P P E A R A N C E S






JENNIFER LEA Board Counsel

HAROLD THIESSEN Board Staff





DONALD ROGERS Hydro One Networks Inc.

RICHARD LONG Society of Energy
Professionals

TONY PETRELLA Ontario Power Generation

DAVID SHORT IESO

RICHARD STEPHENSON Power Workers' Union

MARK RODGER Association of Major Power
Consumers in Ontario (AMPCO)

JOHN DeVELLIS School Energy Coalition

MICHAEL BUONAGURO Vulnerable Energy
Consumers Coalition



I N D E X O F P R O C E E D I N G S



Description Page No.



Upon commencing at 9:36 a.m. 1

HYDRO ONE NETWORKS INC. - PANEL 1, Resumed 1
G. Carleton; F. Jakob; M. Penstone;
A. Stenning; Previously sworn

Preliminary Matters 1

Further Examination-In-Chief by Mr. Rogers 4
Cross-Examination by Mr. Rodger 12
Cross-Examination by Mr. Buonaguro 17
Re-Examination by Mr. Rogers 43
Questions from the Board 47

Luncheon recess taken at 11:20 a.m. 53
On resuming at 1:01 p.m. 53

HYDRO ONE NETWORKS INC. - PANEL 2 55
G. Carleton; F. Jakob; M. Penstone;
A. Stenning; Previously sworn

Examination-In-Chief by Mr. Rogers 55
Cross-Examination by Ms. Lea 76

Recess taken at 2:30 p.m. 107
On resuming at 3:04 p.m. 107

Cross-Examination by Mr. Rodger 119
Cross-Examination by Mr. DeVellis 131
Cross-Examination by Mr. Long 142
Questions from the Board 146

Whereupon the hearing adjourned at 4:22 p.m. 149

E X H I B I T S


Description Page No.


EXHIBIT L2.1: DOCUMENT ON APPLICANT'S CAPITAL
PROJECTS 3

EXHIBIT L2.2: COMPARISON OF APPLICANT'S
RESPONSES TO INTERROGATORIES BY AMPCO
(VOLUME 2, EXHIBIT J, TAB 6, SCHEDULE 1)
AND BOARD STAFF (VOLUME 1, EXHIBIT J, TAB 1,
SCHEDULE 20) REGARDING NUMBER OF CIRCUIT
BREAKERS 40 YEARS OLD AND OLDER AND 50 YEARS
OLD AND OLDER 62













U N D E R T A K I N G S


Description Page No.


UNDERTAKING K2.1: TO PROVIDE A DESCRIPTION
OF TRANSMISSION OM&A FOUND IN EXHIBIT A, TAB 13,
SCHEDULE 2, PAGE 2 OF 4, FOOTNOTE 3 22

UNDERTAKING K2.2: TO PROVIDE A RECONCILIATION
OF ESCALATION FACTORS IN EXHIBIT C1, TAB 2,
SCHEDULE 2, PAGE 7, LINES 9 TO 11 AND EXHIBIT
A-13-2, PAGE 4, TABLE ROW 4 23

UNDERTAKING K2.3: TO UPDATE J-1-22 TO INCLUDE
2006 DATA 24

UNDERTAKING K2.4: TO PROVIDE UPDATED 115 kV
INFORMATION WITH RESPECT TO J-1-22 26

UNDERTAKING K2.5: 2007/2008 BUDGET FOR ASSET
CONDITION ASSESSMENT 30

UNDERTAKING K2.6: TO CONFIRM ANALYTICAL BASIS
FOR SPREADSHEET ATTACHMENT TO J-5-14 48

UNDERTAKING K2.7: TO PROVIDE RECONCILIATION
FOR OM&A FIGURES PROVIDED IN EXHIBIT C1, TAB 2,
SCHEDULE 1 WITH 2004, 2005 AND 2006 FINANCIAL
STATEMENTS 49

UNDERTAKING K2.8: CALCULATION OF POTENTIAL
CAPITAL CONTRIBUTION FOR PRESTON PROJECT 104







Tuesday, April 24, 2007
--- Upon commencing at 9:36 a.m.
HYDRO ONE NETWORKS INC. - PANEL 1, RESUMED
George Carleton; Previously Sworn
Frank Jakob; Previously Sworn
Mike Penstone; Previously Sworn
Andy Stenning; Previously Sworn
MS. NOWINA: Please be seated.
Good morning, everyone. We are reconvening in the matter of
application EB-2006-0501. This is day 2 of the evidentiary portion of the
hearing. Yesterday we began the examination of the panel on sustaining
programs. This morning, Mr. Buonaguro of VECC will cross-examine this
panel, followed by re-examination by Mr. Rogers and Board Panel's
questions.
We will then begin the cross-examination of panel 2, the panel on
development and operations.
Just as an administrative matter: Regardless of how quickly we get
through panel 2, and I have no idea how long that will take, we will not
begin panel 3 until May 7th or May 8th, depending on what happens with
panel 2, but for your planning, I thought you might want to know that.
MR. ROGERS: Thank you very much.
MS. NOWINA: Are think any preliminary matters?
PRELIMINARY MATTERS:
MR. ROGERS: I have several matters, Madam Chair. First of all, I
think we can start off with this, a matter dealing with panel 2.
Through conversations with Board counsel and staff, it became
apparent that there is some concern, I think, about the development capital
budget and what we're asking this Board to do by way of approvals.
It seemed to us that probably the best way to do this would be to
file -- have an explanation at the beginning of panel 2, first of all, as
to the various categories of capital that are included in the submission
before you. It breaks down into four categories, basically, which have
different levels of requirement for Board scrutiny at this time.
We prepared a document, which has a very brief narrative describing
the types of capital projects which are included in the company's filings,
and a graph or tables attached to it which break them out on a project-by-
project basis as Board Staff requested.
Now, we will explain this. I think it's fairly simple once the
document is in hand and we have someone explain it, but what I propose is
to have -- I have had copies made. I will distribute those now. We will
be calling panel 2 sometime during the course of the day, and, when we do
that, the first order of business will be to explain to people how this
works and what is required.
Now, I just want to add I'm not one who likes to file last-minute
documents, particularly acting for an applicant, but in this case we really
thought that this probably is the most efficient way to deal with this
issue.
We hope -- I don't think it will cause people too much concern once
they see what has been done.
MS. NOWINA: All right. Mr. Rogers, this is what we will do. We
will mark it as an exhibit. We will make sure that we have a break before
we begin panel 2 and give parties an opportunity to look at the document.
If they have any concerns regarding their preparation, I'm sure that they
will inform us at that point.
MR. ROGERS: Yes. I guess we're not sitting tomorrow, I believe, and
we're coming back Thursday.
MS. NOWINA: That's right.
MR. ROGERS: So I was kind of comforted by that, too, that if people
do have a serious problem with this and understanding it, we can come back
Thursday and they will have a day to look at it. I hope that won't be
necessary.
MS. NOWINA: All right, thank you.
MS. LEA: We will mark that, then, with your leave, Madam Chair, as
Exhibit L2.1. L2.1.
EXHIBIT NO. L2.1: DOCUMENT ON APPLICANT'S CAPITAL
PROJECTS.
MR. ROGERS: I will just make copies available and people can pick
them up at their convenience.
MR. ROGERS: Now, I have a few other matters, if I might, Madam
Chair, just dealing with yesterday's testimony.
MS. NOWINA: Certainly, Mr. Rogers.
MR. ROGERS: First of all, Mr. Penstone brought to my attention that
there was a tr